Silicon Valley is “oasis in the desert,” buyers should take advantage of present conditions

Real estate consultant Carole Rodoni didn’t mince words when she talked to Silicon Valley REALTORS® at SILVAR’s Palo Alto District this morning. She is appalled at how lawmakers have handled the budget, the deficit, short sales and foreclosures, and even the war in Libya, but with regard to Silicon Valley real estate, Rodoni is upbeat.

The former president of Fox & Carskadon Realtors, former COO of Cornish and Carey Real Estate and Alain Pinel Realtors, and now president of Bamboo Consulting Inc. says the media can talk about a slump in the housing market, but the San Francisco Bay Area is an “oasis in the desert.” This region is the gateway to the Pacific Rim, with the best universities, diversity of culture and education.

“People aspire to live here and there is no more land here. Land is valuable and land here will keep its value,” says Rodoni. “At the end of the day, how can anyone say Silicon Valley isn’t alive and well?”

What should REALTORS® tell buyers? “Tell them they are getting a free gift right now,” Rodoni says.

Prices have come down a bit, interest rates have edged up from 3 percent to about 4 percent, but they are still low. She predicts rates will rise even more by the end of this year, possibly to 5 percent or more, and perhaps 6 and 7 percent in three years because of inflation. “The stars have aligned here,” according to Rodoni. “Where do you find this affordability?”

Rodoni says buyers should “buy it, hold it – don’t spin it, and keep it for at least five years.” Also, while buyers should pay attention to interest rates, she says they should also watch out for lending fees because she is sure they will increase.

“Loans will be 5 to 8 percent more expensive than last year,” Rodoni says. “At the end of the day interest counts, but understand that everything is going up because of loan fees. If you are a buyer, while it’s good to look at price, look also at loan fees. Match interest rate to the loan product.”

She says buyers should ask themselves these questions: Is it the right price? Is it the right place? Examine where you are looking. Will it appraise for that price? Is the lender going to like it? Then she cautions: Do not attempt to low ball when you’re facing a multiple offer situation. How high are you going to go? Especially in this region, you cannot sit with terms and conditions.

“It would be like playing football in a baseball diamond,” she says. “Investors know there is value here and they will continue to come in. Silicon Valley is the bread and butter market. They see the sweet spot and will fight to get it.”